What Investors Need to Know About Tesla's (TSLA) AI Day

Tesla - Shutterstock photo
Credit: Shutterstock

Elon Musk and Tesla (TSLA) have done it again! They had a day during which an announcement was made that captured the headlines and made sure they were the story du jour, both yesterday afternoon and this morning. CNBC this morning seemed to have footage of the goofy dancing robot impersonator from yesterday’s Tesla A.I. Day presentation on a loop. As the free publicity was on CNBC’s Squawkbox it was, of course, accompanied by the usual snarky comments that are host Joe Kiernan’s specialty.

Musk being Musk, however, has found a way to get the last laugh. Yesterday’s cringeworthy “robot” performance looks like yet another example of that. He is someone who blatantly seeks, and always gets, attention and the free publicity that comes with it.

To those unaware of how Elon Musk works, the dancing "fauxbot" would have looked like a somewhat embarrassing display, and his statement that there would be a humanoid bot in production a year from now could be seen as another example of him “misleading” investors. Many are bringing up his promise to have a million robotaxis on the streets by the end of last year and other, shall we say, hyperbolic predictions. In doing so though, they are missing the point: Every investor in Tesla is aware of who the company’s founder is and of how he operates.

Musk’s whole schtick is to come across as the crazy dreamer. Maybe it isn’t a schtick, but actually who he is -- either way, it doesn’t matter: the fact is that only a crazy dreamer or someone acting like one could have built a company that makes battery powered performance cars, which seemed like a ridiculous idea not so long ago. The same people who mocked him then are the ones mocking him now. His “foolishness” and hyperbole made fools of them then and it will make fools of them now. At this point, I doubt there is an investor in TSLA who isn’t aware of this, so who’s fooling who?

Yesterday’s show will have achieved exactly what Elon Musk wanted it to. It has bought the company millions, if not billions, of dollars’ worth of free airtime while at the same time making Tesla seem like a cool, fun place to work. After all, if Tesla is going to be prepared when the world is ready for fully automated vehicles, or humanoid robots, they need to attract the most talented robotics engineers and A.I. minds in the world. You may have looked at A.I. day and thought that only a real nerd could find that interesting and funny, but that is kind of the point.

Investors get that, and they also understand that while the A.I. day serves a purpose, it is essentially irrelevant in the face of this chart since the beginning of last year:

Tesla chart

There have been dips, often dramatic, but the trend is undeniable. What matters is that Tesla is now producing cars profitably, and that their current biggest problem is meeting high demand amidst shortages in chips and other components. If there are problems ahead, they will be because the rate of revenue growth has slowed, or because the company’s market share in China and Europe is not quite as dominant as it once was, and not because some fake robot danced on a stage.

If you believe that they can overcome those potential issues, as they have every issue thrown their way to this point, you can hang onto your TSLA shares and laugh along with Elon Musk at those that are laughing at him.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Martin Tillier

Martin Tillier spent years working in the Foreign Exchange market, which required an in-depth understanding of both the world’s markets and psychology and techniques of traders. In 2002, Martin left the markets, moved to the U.S., and opened a successful wine store, but the lure of the financial world proved too strong, leading Martin to join a major firm as financial advisor.

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